October 1, 2013

Texas Showdown: AT&T Takes Google Fiber Head On In Austin

Google announced plans this spring to bring their high speed gigabit Fiber network to Austin, Texas in 2014. AT&T now hopes to beat them to the punch by delivering a high speed network by the end of the year and a full gigabit network sometime next year as well. AT&T’s “GigaPower” network will deliver the Internet at speeds of 300 megabit per second - about 40 times faster than traditional Internet.

GigaPower will be available on December 1, and those who sign up will have their speed increased to one gigabit next year. AT&T has been operating their fiber optic network in Austin since 2007 and will selectively choose which neighborhoods in the Texas capital will receive this new network. Though the Dallas-based company has once again announced plans to increase speeds in Austin (they also did so in April when Google first announced Fiber), they have yet to announce how much GigaPower will cost.

Businessweek reported that AT&T will open an online portal where Austinites can request their neighborhoods to be among the first to experience this new network. According to AT&T, the 300 megabit per second connection will be fast enough to download an HD movie in about two minutes. Existing networks need about 30 minutes or more to download the same movie. Google is also asking residents to sign up for the right to a gigabit Fiber connection. The new service will be lumped into existing packages and will be called U-Verse GigaPower.

Though the promise of faster Internet is always enticing, AT&T remains mum on how much they’ll be charging for the service, saying only that it would be a good value to customers. Google seems likely to undercut what any of their competitors will be charging for the ultra-fast connection. When Fiber gigabit launches in Austin, users will pay $70 a month for simple Internet access or $120 a month to bundle this with television service.

By contrast, basic U-verse service with download speeds of up to 18 Mbps and TV starts at $84 a month. Verizon offers speedy, 500 megabit per second service, but when packaged with TV and phone service, customers pay $310 each month. AT&T will likely have to try and straddle these two price extremes to present a good value to their customers.

GigaPower will run on AT&T’s existing fiber network and will not be compatible with any part of their older infrastructure. This existing network will help AT&T begin to quickly deliver the 300 megabit per second service to customers and possibly aid in the roll out of full gigabit speed in 2014. Google, on the other hand, is starting from scratch by laying their own fiber in these networks.

According to AT&T CEO Randall Stephenson, it makes sense to compete head on with Google. Noting installation costs have dropped as demand for faster speeds has increased, Randall told investors; “I fully expect you’ll see us doing multiple markets like this over the next few years.”

Google first announced Fiber gigabit service last year and began laying groundwork for this service in Kansas City neighborhoods. Since then the search giant and Android maker has promised to deliver the same network to other communities in Kansas as well as Provo, Utah and Austin, Texas.